Throughout my years of staking online poker players, quite often I’ve dealt with the inevitable decision from our players that they’ve chosen to go on their own dime.
There have been situations where I thought it made complete sense for the player to do so, and there have been other times where I thought it made no sense at all and that the player was making a huge mistake. Last week I was able to spend some time with one of our players, and we were talking about his long term goals with poker. He mentioned that one long term goal he has is to get on his own dime. He asked me what I thought would be required for a player to go on his own dime. He also mentioned that he thought I’d have a biased view as the backer, and that I try to answer as unbiasedly as possible. I gave him a brief answer without too much in depth thought, but I’ve since thought about it more and have a more full response here:
Misconception Among Players Who Are Backed:
A lot of players have said to me over the years, “You must hate to see players go on their own dime, if they’re a good player you must want to back them for their entire lives”. The only truth in this is the fact that yes, I’m running a business, and yes, having profitable players to back who I’ve established long term relationships with is great for my business. But much more important is that going into a backing relationship with a player I’m under the assumption that it’s every poker player’s goal to eventually go back to own diming. I was once a professional poker player who was backed, and of course one of my goals was to get onto my own dime. Given that assumption, it’s my goal to work with players to get their games to the highest level possible, working their games up through the stakes, to eventually give them the tools (both monetarily and skill level wise) to go on their own dime at the end of our relationship. If I’m able to do that then we will have had an extremely profitable and successful relationship together!
So What Do I Think Is Required?
Skill Level: I haven’t found a situation yet in my backing career where I thought it made sense for a player to go on their own dime prior to getting their game up to a level where they can beat the highest stakes that they have access to. This article is focused on cash game players playing on US facing sites. The highest stakes that run consistently on US facing poker sites is currently NL2000. I’ve mentioned this to our players before, but the main site that runs NL2000 consistently doesn’t provide sufficient options for cashing out to make grinding 4 tables of NL2000 a viable solution for any professional poker player (regardless of being backed or not). When playing NL2000 and doing well, you can’t cash out the money fast enough given the upswings of these stakes, and when playing and doing poorly, you can’t redeposit quickly enough to get back to playing NL2000. Given my opinion on this, the highest viable stakes you can play on US facing sites is NL1000. Leaving a stake prior to being ready to own dime NL1000 makes no sense because as you progress through the games,you’re utilizing our coaching and training program to get you to the next step. A better example is that if your game is currently beating NL200 (and you’re in a position to own dime these stakes), we’re going to be moving you into the NL400 games very soon. One of the huge benefits from being backed is moving up in stakes to levels you haven’t proven you’ve beaten yet. Using our capital, and even more importantly using our training tools to get you to the next highest stakes is much more valuable than remaining stagnant at lower stakes.
Capital: Waiting to go on your own dime until you reach the highest viable stakes available (NL1000 currently) is the most important aspect of this conversation. The next most important is of course having the correct amount of capital prior to making this move. When I was having this discussion with our player last week, he asked me point blank “How much money do you think I need to be able to own dime 5/10?”. Without giving it much thought, I somewhat quickly answered that I think you need to have $30,000 to make the move to 5/10. Swings are an inevitable part of poker, and I always say “If there were no swings everyone would be a professional poker player”. Given these swings at NL1000, you have to have enough money in your bankroll to handle the swings. If you’re only playing on one site, you might not want to keep all $30,000 in your poker account. Maybe you keep $20,000 in there with $10,000 held behind. The money held behind could be used for a reload, but it could also be used for live cash games and maybe even occasional small stakes live MTT shots. The important thing though is that all $30,000 is earmarked solely for poker. And this is a very important omission I made when discussing everything last week. I somehow completely forgot about living expenses. Going on your own dime without sufficient savings for living expenses would be a disaster. Most people say having 4-6 months of living expenses saved up is a good rule of thumb. Living expenses range wildly for all poker players. Some guys live with their parents and have very little overhead, some guys have families to support and their monthly expenses are quite high. You have to take an honest look at how much money you spend each month and multiply that by 4-6x, depending on how risk averse you are. For example, if your living expenses are $3,000/month and you want 5 months saved up, then that means you need $15,000 in a checking account that is completely unrelated to your $30,000 in poker funds you have saved. So in this case you would need $45,000 before going on your own dime.
Discipline: Being backed forces players to be disciplined. Here are some examples of this discipline that we require from our players:
-Daily Updates to a Spreadsheet shared in Google Docs
-Daily Stop losses (With an email to us if a stop loss is reached, which is generally followed up with a review of the day’s play)
-Being Active in our chat group discussing hand histories with other players
-Monitoring bankroll noting when it might be too low or too high (requiring cashouts or reloads)
-Monthly End of Set reporting
-Monthly Coaching Sessions
That’s a lot of discipline that we require from our players. That discipline adds to their bottom line. When a player goes on their own dime, they need to be ready to continue with this without us being there forcing them to stay on top of things. If going on your own dime means:
-No longer keeping track of results in written form
-No longer adhering to daily stop losses, and instead chasing losses
-Not having an active group to discuss hand histories with
-Monitoring your bankroll to ensure you’re always properly funded, but also to ensure you’re cashing out diligently to maximize the effectiveness of your cashouts
If this is what it ends up looking like when you’re no longer backed, then this is a recipe for disaster. Online poker has advanced so much in the past 10 years, that you have to treat it like any other business. If you don’t, there’s someone else out there that will, and it’s way too competitive of an environment these days to survive.
Appetite for Risk: And finally, you have to have a high appetite for risk. I know a lot of extremely successful poker players who are very risk averse individuals. Having a high appetite for risk doesn’t necessarily translate into being a better poker player, but if you don’t have a high appetite for risk, then own diming is probably not for you. We stake numerous players who have all of the requirements above needed to own dime, but they continue to be backed due to this risk aversion. I’ve seen players who decide they want to invest their capital into other investments. Many of our players were burned from Black Friday, and although they’ve made a decision to continue playing poker, they’re doing it differently this time around, and instead of having most of their net worths invested in offshore gaming sites they’ve decided to invest their own capital in anything ranging from: the Stock Market to Real Estate to Friends Start Up Companies to their own Poker Training Sites.
At the end of the day there are a lot of factors that come into the decision of a player going on their own dime. I’m not a greedy business owner who is going to sit here and try to convince every player that they should never go on their own. With that said, I do want players to know what I think the prerequisites should be to make that move. When players are ready, we’re extremely happy for them and are proud of our joint accomplishment in getting them to that point in their career!